This is only if you use it hierarchically. No one prevents you from having a tag projects and another tag newproject. Your emails just have both tags assigned and you are good to go
The tags themselves end up in an hierarchy without it affecting the tagged contents.
From a tagest perspective, and the discovery affordances, there is a significant difference.
Hierarchical tagsets allow you to navigate via tags, affording document discovery by that mechanism.
That becomes more significant as you're working with a larger, richer, and more structured tagset.